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Healthcare, Pages: 2

Establishing a Pro Forma Operating Budget

Establishing a Pro Forma Operating Budget

Corazon y Alma Health
Prenatal Care Pro Forma
Service #2
Allocation
Service #2 Prenatal Pro forma Basis
Operating Revenue
Prenatal Care Pro forma Assumptions: Outpatient Charges $12,150,000 $12,750,000 Revenue
Revenues: Total Charges $12,150,000 $12,750,000
Alternative Service Annual Census = 10,000
Average Charge per Visit = $85 Deductions from Charges
Payor Mix – 70% Medicaid; 40% “Allowance” deducted from Charges Discounts and Allowances ($4,860,000) ($5,100,000) Revenue
Projected Annual Visits = 15 Charity Care ($911,250) ($1,275,000) Revenue
Charity Care = 10% of revenues Total Deductions ($5,771,250) ($6,375,000)
Other Operating Revenues = $150,000
Investment income and donations are the same  as Service #2
Net Patient Revenue $6,378,750 $6,375,000
Other Operating Revenues $333,947 $150,000 Revenue
Expenses:
90% of staffing from Service #2 will transfer to the alternative service Total Operating Revenues $6,712,697 $6,525,000
 Remaining staffing will be transferred to other service lines if possible
Benefit structure is the same for all service lines. (Note: 25%) Operating Expenses
Supplies = $650,000 Salaries $3,559,737 $3,203,763 Expenses
Purchased Services = $481,000 Benefits $889,934 $800,941 Salaries
Other expenses is the same as Service #2 Insurance $15,000 $15,000 Sq. Ft.
Bad Debt = $750,000 Supplies $607,500 $650,000 Expenses
Square footage for Prenatal Care is same as Service #2 Purchased Services $532,895 $481,000 Expenses
Existing depreciation assets will transfer to the alternative service Utilities $3,682 $3,682 Sq. Ft.
Rent $955 $955 Sq. Ft.
Repairs and Maintenance $955 $955 Sq. Ft.
Interest $5,455 $5,455 Sq. Ft.
Other $22,026 $22,026 Expenses
Bad Debt $607,500 $750,000 Expenses
Total Operating Expenses $6,245,638 $5,933,777
Operating Income $467,060 $591,223
Nonoperating Items
Investment Income $140,833 $140,833 Revenue
Donations and Fund Raising $22,026 $22,026 Revenue
Total Nonoperating Gain (loss) $162,860 $162,860
Operating Income Before Noncash Items $629,920 $754,083
Noncash Items
Depreciation ($9,055) ($9,055) Sq. Ft.
Net Income $620,865 $745,028
Ratio Analysis
Total Margin:
  Net Income/ $620,865 $745,028
  Total Operating Revenues + Nonoperating Gain $6,875,557 $6,687,860
9.0% 11.1%
Operating Margin:
  Operating Income/ $467,060 $591,223
  Total Operating Revenues $6,712,697 $6,525,000
7.0% 9.1%
Salaries as a % of Total Operating Revenues 53.0% 49.1%
Supplies as a % of Total Operating Revenues 9.1% 10.0%

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Question 

Establishing a Pro Forma Operating Budget

For this assignment, you will complete the pro forma operating budget to reflect on how the variance analysis, mitigating risks and value-based care, as you create a strategic plan for the prenatal service line. This assignment will be submitted with Task 1.

Establishing a Pro Forma Operating Budget

Establishing a Pro Forma Operating Budget

Activity 1
For this activity, you will complete the Pro Forma Operating Budget spreadsheet to establish a pro forma operating budget for the new value-based prenatal service line at Corazon y Alma Health by doing the following:

Download the Pro Forma Operating Budget spreadsheet (If an accessible version is needed, download the filled Pro Forma Operating Budget Accessible spreadsheet (Assignment 3).
Review the video Pro Forma Tutorial.(9:39m) (Pro Forma Tutorial Transcript is available with accessibility review completed and approved for distribution and use.).
Activity 2
Review the stakeholder profiles in the Corazon y Alma Health Profile and complete the following activity.

References

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Berger, S. (2008). Fundamentals of health care financial management: A practical guide to fiscal issues and activities (3rd ed.). https://www.dphu.org/uploads/attachements/books/books_1438_0.pdf

Canter, J., Mikkelsen, L., Simons, B., & Waters, R. (2013, January). How can we pay for a healthy population: Innovative new ways to redirect funds to community prevention. The Kresge Foundation-The California Endowment-The Robert Wood Johnson Foundation. Prevention Institute, 1-9. https://www.preventioninstitute.org/sites/default/files/publications/How%20Can%20We%20Pay%20For%20a%20Healthy%20Population.Final.pdf

Corazon y Alma financial data. (n.d.). Master of Health Leadership Program. [Excel spreadsheet] Western Governors University.

Corazon y Alma profile (n.d.). Master of Healthcare Administration Program. Western Governors University. 1-3. https://wgu.yourlearningportal.com/wgu/resources/courses/wgu_courses/hcm/mhl/C984_MHL5510_financial_management/resources/corazon_y_alma_profile.pdf

County health rankings & roadmaps. (2016, February 4). Funding guide: Securing additional resources for community health improvement. A Robert Wood Johnson Foundation Program. University of Wisconsin Population Health Institute: School of Medicine and Public Health. https://www.countyhealthrankings.org/resources/funding-guide-securing-additional-resources-for-community-health-improvement

Finn, T. (2007, October). A guide for monitoring and evaluating population-health-environment programs. Measure Evaluation. U.S. Agency for International Development (USAID). https://www.measureevaluation.org/resources/publications/ms-07-25

Flieger, S. P. (2017, October 10). Implementing the patient-centered medical home in complex adaptive systems: Becoming a relationship-centered patient-centered medical home [Author manuscript]. National Center for Biotechnology Information. U.S. National Library of Medicine. National Institutes of Health. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5634522/

Foubister, V. (n.d.). Case study: Qualifying as a patient-centered medical home. The Commonwealth Fund. https://www.commonwealthfund.org/publications/newsletter-article/case-study-qualifying-patient-centered-medical-home?redirect_source=/publications/newsletters/quality-matters/2008/january-february/case-study-qualifying-as-a-patient-centered-medical-home

Hudak, R.P., Julian, R., Kugler, J., Dorrance, K., Ramchandani, S., Lynch, S., Dinneen, M., Evans, P., Kosmatka, T., Padden, M., & Reeves, M. (2013). The patient-centered medical home: A case study in transforming the Military Health System. Military Medicine. 178(2), 146-152. https://eds.a.ebscohost.com/eds/pdfviewer/pdfviewer?vid=2&sid=3bfddeb1-3ee8-43e2-b763-26c779d32ad6%40sdc-v-sessmgr01

Miller, H. D. (2009, September/October). From volume to value: Better ways to pay for health care. Health Affairs, 28(5), 1418-1428. doi:10.1377/hlthaff.28.5.1418 https://www.proquest.com/docview/204628705?accountid=42542

Pearlson, J. (2014, November 10). Creating a care coordination infrastructure to achieve triple aim goals. Becker’s Hospital Review. https://www.beckershospitalreview.com/hospital-management-administration/creating-a-care-coordination-infrastructure-to-achieve-triple-aim-goals.html

Pro Forma Operating Budget. (n.d.). Master of Health Leadership Program. [Excel spreadsheet] Western Governors University.

Pro Forma Tutorial. (n.d.). Master of Health Leadership Program. [Video] Western Governors University. https://wgu.hosted.panopto.com/Panopto/Pages/Viewer.aspx?id=f758afd2-07d2-4258-8594-a8cf0119a0cf

Towne, R. (2019, August 19). NEHII & KPI Ninja: Building a high-performance integrated population health infrastructure. Ninja Insights. https://blog.kpininja.com/?p=389